Are You ready For Major Employment Changes on July 1?

By Chelsea McGuire, Arizona Farm Bureau Government Relations Director with contributions by Julie Murphree, Communication Director: In addition to raising Arizona’s minimum wage, the Fair Wages and Healthy Families Act also implemented mandatory paid sick leave for Arizona employees. Employers with no paid sick leave program must implement the act’s requirements beginning July 1, 2017. If you already have a company policy regarding earned paid sick leave, you should update it so it is in accordance with the new law and provide the updated policy to your employees before July 1.

Arizona Farm Bureau wants to help you and your company come into compliance with the law with as few headaches as possible. Join us on July 12 at 9:00 am for a FREE webinar with attorney and employment law specialist Julie Pace of the Cavanaugh Law Firm. The presentation will be followed by a live Q&A where you’ll have the chance to ask your questions about the act and what you need to do to make sure your business is complying.

Here are just a few of the act’s basic requirements:

• Employees must accrue 1 hour of paid sick leave time for every 30 hours they work. The 30 hours is not confined to a work week or pay period.
• Unused paid sick time must either carryover to the next year, or must be paid out by the employer at the start of the next year.
• Employers may choose to cap the rate of accrual and use of the paid sick leave to 40 hours per year (if more than 15 employees) or 24 hours per year (if fewer than 15 employees).
• A poster outlining employee benefits and employer obligations under the act must be conspicuously displayed in the workplace:
  • English: https://www.azica.gov/sites/default/files/AZ%20Earned%20Paid%20Sick%20 Time%20Poster%202017.pdf
  • Spanish: https://www.azica.gov/sites/default/files/media/EPST%20Poster_122916-SP.pdf
• For more information and frequently asked questions: https://www.azica.gov/frequently-asked-questions-about-wage-and-earned-paid-sick-time-laws

“Many people and companies --even payroll services, lawyers and HR professionals-- are not understanding this law correctly,” explains Julie Pace, expert attorney in employment law for Cavanagh Law in Phoenix. “Some companies are providing too much in benefits, not using the right word choice, using word choice that could subject them to liability and claims, and generally misunderstanding what the law does and does not do. There are many nuances regarding this law.”

Cavanagh’s Pace said July 1 changes will even have to be reflected in employee paychecks. In addition to the notice and posting requirements, employers are required to provide information about the amount of  paid sick time (or paid time off, if the employer has a compliant paid time off policy) awarded with each paycheck. The paycheck, or a separate document provided with the paycheck, must include:

(1)   The amount of earned paid sick time or PTO available;

(2)   The amount of earned paid sick time or PTO taken year-to-date; and

(3)   The amount of pay employee has received as earned paid sick time or PTO.

Employers should ensure that their payroll system is prepared for the new requirements of earned paid sick time.

Cavanagh Law’s quick tips regarding the July 1 Deadline follow.

1.     Avoid using terms accrual or accrued or earned as part of language in policies or on paycheck. Instead, consider using PTO or Sick as the words to denote the time available or used without any reference to accrued.
2.     Consider updating your policies as use it lose it if your company does not want to potentially have to pay out sick or PTO when an employee separates employment or be subject to treble wage claim regarding it.
3.     Consider adding to your policy that newly hire employees cannot take any leave until after the first ninety (90) days of employment.
4.     A properly worded PTO policy may offer more advantages to a company than vacation and sick leave policies. If you want to move to a PTO plan, consider phasing into a PTO policy either this year or next year if insufficient time to fully implement and evaluate a PTO plan.
5.     Consider a cap on PTO or sick time rollover pursuant to current proposed and eventually final ICA regulations.
6.     Companies do NOT need to award in a lump sum at time of hire or on July 1 the 40 hours of sick or PTO to comply with the new law. It can be pro-rated weekly based on hours actually worked and applying the formula up to the cap of hours to be awarded. Companies can use anniversary, calendar year or 12 month time period from July 1 to July 1.

Still have questions? So do we! Don’t miss out on this opportunity to ask an expert all your questions about Arizona’s newest labor law. To be part of the July 12^th Webinar go to Eventbrite and register. All participants will receive an informative PDF after the event to keep in your employment records.

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